Urban&Civic sells Stansted Hotel to LGIM for €54.48m (GB)

Urban&Civic plc has sold the recently completed Hampton by Hilton hotel at Stansted Airport to LGIM Real Assets (Legal & General) for a minimum consideration of €54.48m (£48.3m). An additional sum of up to €1.2m (£1.1 m) will be paid to Urban&Civic, depending upon operational performance over the next two years. The new hotel opened for trading in late July 2017 and is one of only two that are on-terminal at Stansted. Initial occupancy levels and achieved room rates are running above pre-opening forecasts.

The minimum consideration represents a projected yield on stabilised EBITDA three years forward of 6.75% and is 15% higher than the EPRA valuation of the completed asset in the interim balance sheet as at 31st March 2017. Profit realised on actual cost is expected to be in the order of €9.59m (£8.5m). Cash returned back into the business, after accounting for development project bank debt, will exceed €33.84m (£30.0m).

Commenting on the sale Nigel Hugill, Chief Executive, said:"The sale of Stansted represents an obviously strong outcome for the Group but the core reason for establishing Urban&Civic was to provide new housing choices and accelerate supply through Master Development. That involves creating environments in which people actively want to live and a delivery structure that encourages speed and quality from those housebuilders looking to expand output. The model can be seen to be working and is directly consistent with current Government policy. We shall be going all out from here. "

Tom Roberts, Head of Strategic Investment and Regeneration at LGIM Real Assets, said:“The fundamentals of this hotel speak for themselves - being the closest hotel to Stansted airport’s security gate, it offers absolute convenience to its guests. The high quality of the new development and the Hampton by Hilton brand, under which the hotel operates, were also major factors in our investment considerations. Since its opening a few months ago, the occupancy figures have been very encouraging and we strongly believe this asset will prove to be an attractive addition to our portfolio.”

Proceeds of the sale will be directed into the Master Development of further strategic projects.